Encouraging performance from C&C with sales up 10% in the four months to June

DRINKS maker C&C reported that sales were up 10 per cent in the four months to the end of the June.

In a trading update published before the group’s annual general meeting this week, the company revealed an “encouraging performance” as it saw growth in the sales in its branded drinks.

Headquartered at Bulmer House in Crumlin, the group produces a range of drinks across the UK and Ireland.

Sales of core brands, including Tennent’s and Bulmers, rose by 9 per cent in the same period.

In May, C&C issued a profit warning after it incurred a one-off charge of €25m due to issues implementing a new system upgrade.

The group said service levels are now “steadily improving” as it looks to resolve the enterprise resource planning (ERP) system implementation issues in the British distribution business.

Chief executive Patrick McMahon, who was appointed to the role in May, said there was more work to be done.

“The group’s performance is not at the level we planned, because of the ERP issues, and resolving them fully including the permanent restoration of OTIF (on time in full) metrics, remains our immediate objective and focus,” he said.

The group said it had a leverage multiple of 1.3x at the end of the its previous financial year, which is set to temporarily increase as a result of the system implementation challenges.

However, it is expected to remain within the target range of 1.5x to 2x in the current financial year, which comes to an end next February.

C&C has now proposed a dividend of 3.79 cents for its previous financial year, subject to shareholder approval at its AGM.

Operating profit for the year to the end of February this year rose to €84.1m, up 75.6 per cent compared to the previous financial year.

Net revenue increased by 18.4 per cent in the same period to €1.69bn. C&C attributed this growth to a 4.2 per cent boost in volumes, as well as price hikes of 14.2 per cent.

“Despite the challenges relating to the ERP system implementation, the performance of our brands, the strength of the group’s balance sheet and our robust cash generating capability have enabled us to recommend a dividend to our shareholders,” executive chair Ralph Findlay said.

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